In these troubled times, should we be investing in oil?

The stream of horrifying news coming out of the Middle East and Ukraine has sent shockwaves around the world. Inflation has risen in the US and there is potential for oil supplies to be hit by escalating tensions.

Stock markets held up fairly well after Iran’s failed air strike on Israel at the weekend, rising early on Monday before falling about 2.3 per cent — less than you may have thought it would. The oil price actually fell 4 per cent — again, not the reaction many expected.

After Israel’s retaliation yesterday, markets rose slightly again, but less than before, and the price of oil rose, then fell again immediately.

• Is oil a good investment?

This muted reaction can be explained by the